Should I pay cash for a house?
May 24, 2010 1:49 PM Subscribe
Under 30 with a 16-month-old. Getting $750k from insurance settlement. Have $65k in a money market from previous settlement, $10k in my Roth IRA, and $13k in my 16-month-old's 529. Should I pay cash for a house?
posted by anonymous to work & money (19 answers total) 4 users marked this as a favorite
My husband and I made less than $30k last year (he's a private contractor and has suffered with the economy and I am a stay-at-home-mom). My husband is enrolling in school full time this fall to finish his degree. Though we both have good credit, it will be two years before we're both working and can qualify for an income-based mortgage. We're currently renting and want/need more space. If we pay cash for a house ($300-$350k), we'll invest the rest ($300-$350k).
Right now my first concern is freedom from a house payment. Eventually we'd like to invest monthly what our mortgage payment would have been (around $1400), but as I said, I think that's about two years away.
I understand when you pay cash for a house you sacrifice the return you could get by investing in something else, and I understand you sacrifice the tax shelter. I dont want to commit financial suicide, but given my situation as described above, I feel like I have some freedom to choose. I would only be investing 50% of my available cash, would have the remaining 50% for investments and would still have $65k liquid in my current money market.